Question

The following report reflects numerical data for Polar Corporation in July: Sales $27,000 Variable costs $11,880 Fixed costs $7,000 What is the contribution margin per unit if 10,800 units were sold in July?

Answer 1

$1.40

Step-by-step explanation:

The total contribution margin is determined by deducting variable costs from sales during the period:

`CM = \$27,000 -\$11,880\\CM = \$15,120`

Assuming a production of 10,800 units, the contribution margin per unit is:

`CM_u = (\$15,120)/(10,800)\\CM_u =\$1.40`

The contribution margin per unit in July is $1.40.